dmertz
Level 15

Retirement tax questions

The IRS is not known to deny the waiver for reasonable cause.  It seems that they really do not want to impose the penalty unless taking the RMD late was deliberate.  Your explanation statement regarding taking the RMD late is more important than the timing of the filing of Form 5329.  As long as your explanation statement shows the date that the RMD was taken and you provide any reasonable explanation, that should be sufficient; diligence is shown by having made the distribution as soon as you became aware that it had not been completed by year-end.

It's entirely possible that nobody at the IRS even looks at the e-filed requests for waiver unless your tax return is reviewed for some other reason.  It seems that granting the waiver is the default action by the IRS when they receive a request for waiver.

If you will be filing your 2017 relatively soon after the January 29 filing-season opening date indicated by the IRS, that's even less reason to file Form 5329 separately.